Pakistan’s economic growth outlook brightens with Fitch upgrade

Pakistan’s current account turns positive, inflation drops to 0.3%

29 May 2025
Pakistan’s Economic Growth Outlook Brightens with Fitch Upgrade

In a significant boost to investor confidence, Pakistan’s Ministry of Finance has released its latest Monthly Economic Outlook Report, highlighting positive trends across several economic sectors.

From an upgraded Fitch rating to a surprise current account surplus, the signs are pointing towards a steady economic recovery.

According to the Ministry, Fitch Ratings upgraded Pakistan’s economic outlook, a development that reflects improving fiscal management and economic stability. The report reveals a $1.9 billion current account surplus, a rare and encouraging figure for the country’s balance of payments.

Inflation also showed a welcome decline, with monthly inflation dropping to just 0.3% in April, signaling easing pressure on household budgets. Encouraging figures were also reported in agriculture, with wheat production estimated at 28.98 million tons—an important sign of food security and self-sufficiency.

One of the most remarkable highlights came from the automobile sector, which recorded a staggering 95.8% increase in activity, underlining rising consumer demand and industrial growth. Meanwhile, Large-Scale Manufacturing (LSM) showed a 1.8% year-on-year increase, although a slight 4.6% monthly dip was noted.

The country’s IT exports also impressed, surging by 21.1%, while remittances saw a significant boost, further strengthening foreign exchange reserves. Out of 22 industrial sectors, 12 showed positive performance, reflecting growing confidence in the manufacturing base.

In terms of revenue, overall tax collection rose by 36.7%, which helped shrink the fiscal deficit to 2.6%. The government also took a step forward in sustainable finance by launching its first Green Sukuk—an initiative aimed at promoting environmentally friendly development.

However, the report wasn’t without caution. It noted sustained price hikes in education and healthcare, and a concerning trade deficit of $21.3 billion despite an 11.8% rise in imports. Still, social safety programs remained robust, with Rs 409.4 billion disbursed under the Benazir Income Support Programme.

Looking ahead, the Ministry projects that inflation could remain within 2% for the rest of the fiscal year—a potential game-changer for economic planning and household finances.

The overall tone of the Monthly Economic Outlook Report is cautiously optimistic. While challenges remain, the data suggests that Pakistan’s economic growth outlook is moving in the right direction, giving both investors and citizens reason to stay hopeful.

In a significant boost to investor confidence, Pakistan’s Ministry of Finance has released its latest Monthly Economic Outlook Report, highlighting positive trends across several economic sectors. From an upgraded Fitch rating to a surprise current account surplus, the signs are pointing towards a steady economic recovery.

According to the Ministry, Fitch Ratings upgraded Pakistan’s economic outlook, a development that reflects improving fiscal management and economic stability. The report reveals a $1.9 billion current account surplus, a rare and encouraging figure for the country’s balance of payments.

Inflation also showed a welcome decline, with monthly inflation dropping to just 0.3% in April, signaling easing pressure on household budgets. Encouraging figures were also reported in agriculture, with wheat production estimated at 28.98 million tons—an important sign of food security and self-sufficiency.

One of the most remarkable highlights came from the automobile sector, which recorded a staggering 95.8% increase in activity, underlining rising consumer demand and industrial growth. Meanwhile, Large-Scale Manufacturing (LSM) showed a 1.8% year-on-year increase, although a slight 4.6% monthly dip was noted.

The country’s IT exports also impressed, surging by 21.1%, while remittances saw a significant boost, further strengthening foreign exchange reserves. Out of 22 industrial sectors, 12 showed positive performance, reflecting growing confidence in the manufacturing base.

In terms of revenue, overall tax collection rose by 36.7%, which helped shrink the fiscal deficit to 2.6%. The government also took a step forward in sustainable finance by launching its first Green Sukuk—an initiative aimed at promoting environmentally friendly development.

However, the report wasn’t without caution. It noted sustained price hikes in education and healthcare, and a concerning trade deficit of $21.3 billion despite an 11.8% rise in imports. Still, social safety programs remained robust, with Rs 409.4 billion disbursed under the Benazir Income Support Programme.

Looking ahead, the Ministry projects that inflation could remain within 2% for the rest of the fiscal year—a potential game-changer for economic planning and household finances.

The overall tone of the Monthly Economic Outlook Report is cautiously optimistic. While challenges remain, the data suggests that Pakistan’s economic growth outlook is moving in the right direction, giving both investors and citizens reason to stay hopeful.